Supply chain improvements through clustering: Relationships and competitive collaboration in the Norwegian furniture industry

Abstract

Master's thesis in Firm managementThere is an on-going debate regarding what Norway will do when the country can no longer rely as heavily on the oil as a source of wealth and prosperity. As there is a tradition for designing and making furniture in Norway, and the furniture industry is not dependent on favourable natural conditions, this industry could represent an alternative. As the Norwegian furniture manufacturing companies are producing in one world’s most high waged countries, they must focus other aspects than price. As the international competition is strengthening, the Norwegian furniture industry must also increase their competitiveness accordingly. The purpose of this thesis is to explore opportunities for the Norwegian furniture industry to advance through cluster participation, with a focus on supply chain and relationships. The research problem is: “In what ways can the Norwegian furniture industry improve their supply chain through participation in an industry cluster?” Supply chain is presented as strategic rather than a pure operational aspect together with the framework for supply chain management, which is based on network structure, business processes, and management components. Information and knowledge sharing, along with power are the focus of relationship theory. Characteristics and possibilities are the main areas of interest in cluster theory. The data is collected through a qualitative method. Multiple sources of collection have been used, but interviews make up for the most important part. Interviewing different actors allowed for several perspectives to be included. Informal talks, observations, a presentation, and literature and documents are also included, to gain a better understanding as well as verifying what was found in the interviews. In order to answer the research problem, the data were analysed through four research questions. The two first questions seek to map out the current state of supply chain and relationships in the companies, in order to find out were they are today versus were they want to be or could be. The third question is for identifying possible changes to be made, while the fourth question looks at in what way being in a cluster can make a difference in making these changes. Different challenges or points for improvement were identified, and suggestions to possible measures, related to improving the supply chain for the companies in the industry, are: Courses and training programs, which could contribute in raising the competence level and professionalism as well as better the current situation were it is difficult to attract graduates to the industry; branding/employer branding, which would also potentially contribute to attract graduates to the industry; framework agreements, which could reduce the cost of non-strategic or indirect purchases through economies of scale and a switch in the power structure; and arenas for information sharing and networking, which could contribute to enhanced collaboration, increased knowledge sharing and less vulnerable suppliers